Suggestions Sought

[Instabus]

So to start with you won't really have any idea how many people are actually using the card ? Or how much they are saving ? (Great stats to build on sales btw - on average every card holder saves £50 a month etc.)

To save £hundreds a card holder would need (based on 20%) be spending at least £1000 at places which take your card. Is this realistic ?

Also just say you can get someone to pay £14 for a card, what measures do you have in place to stop them handing it around their friends and family ?

Sorry for disappearing just as things were hotting up but the dog needed a walk!

Correct, in its first guise, our product will be in its most primitive form so no means of monitoring card usage until we can afford to incorporate some technology at the point of sale.
I totally agree that these stats will be priceless and I assure you we will be working towards this eventuality.

The spend of £1000 over the course of your holiday in order to save £200 is perfectly realistic.
We have 4 and 5 star hotels on board offering 10% - 30% off their rates from rooms that cost £150+ per night.
Additionally we have quality restaurants with main courses at circa £20 and other quality establishments.
Even on a lower budget over the course of your holiday travelling around Scotland and the UK for a couple of weeks you would be spending over £100 per day including accommodation.

On the handing the card around element, at the moment they are free to do this and we don't particularly want to stop them as this is great marketing. The card expires after 3 months so if more people get to sample it during its validity period then the more people are likely to buy it in the future.

 

[Instabus]

I don't disregard the idea that people love a bargain, they do, it's making them pay for the card upfront which will be the biggest issue.

If you can give them away for free and make money in a different way then you will find it much easier getting this concept off the ground and making a profit.

As I say, I am going down the route I have outlined first as it is the route that all research and feedback suggests is a viable one.
If this fails then we are open to trying other strategies but as there are precedents already there for this model, I'm comfortable with it suiting our product.

TasteCard had £1.5m in the bank last time I checked and our product is much better than theirs.

 

[Psl]

I would take the hotels out of the tourist card offering and create a business- traveller card offering as well. Make both specific to the markets that you are servicing.
Hotels, garages, tyre, laptop repairs etc for the business card. Tourist attractions etc for the tourist card, and there will be business that go on both cards.

 

[DavidAshdown]

OP, I really would appreciate an answer, how many have you sold ?

 

[Instabus]

In answer to your actual question: as an investor I wouldn't touch it with a barge pole. In my mind, coupon cards went out with del boy & the 80's. No one wants to pay for something they are not sure they are going to use.

Also, you say you have plans to develop and advance the product by reinvesting later and without using the technology you will have in the future. Unfortunately today is all about the other way round. With Groupon and all the other sites popping up with huge budgets, advanced technology and dynamic sales and marketing creatives before they even launch, your chances of survival are slim.

Yes, businesses may be fed up with paying high percentages of fees to these organisations but this is the way it is at the moment. They may not like it but they are not doing anything about it. They may let you risk your money by trying a different way with no loss to them but they wont do it themselves.

I think you have been hyped up by the success of gaining advertisers but trust me, that is the simple part.

The tourism idea has some legs but not a lot. When I travel abroad, I don't buy vouchers or discount vouchers before I go for things I may or may not use when I arrive there. Afterall, I'm on holiday and most of my decisions are impulse ones and based around how I feel on the day. I don't want to be tied to doing something because I have bought a voucher for it.

Sorry, but this really sounds like an idea that you have become so passionate about you can't see the woods for the trees. Please don't take that the wrong way because you have faith in your idea but unfortunately it takes a lot more than faith to succeed.

Last but not least, you are in one of the most highly competitive markets possible, with television, newspaper, radio adverts every two seconds aiming at offering deals, bargains, hotel rooms, etc etc.

I personally think the reaction from the public will be the same as from investors: I'm out.

Thanks for your views but you are missing too many key points for me to consider them too seriously.

Your first point that coupon cards went out in the 80s is firstly complete nonsense as they are everywhere today in a multitude of formats.
The precedent has been set for people paying up front for something they are not sure they are going to use but with our product, they will see very quickly that they are likely to use it.
Everywhere they go they will see our brand, offline marketing material and regularly be offered our card to purchase from the 25% of our advertisers who want to sell the card and other 3rd party organisations such as the tourist board (strong interest noted), tour operators and petrol stations.

Very quickly into the year we will be able to invest in our Smart Phone App and for next year we will be looking to incorporate point of sale technology and card security.
We just need to sell a relatively few cards to a huge marketplace in order to generate the necessary funds to invest in this.

Also, there is no point in comparing my product/model with that of Groupon's. The only similarities are that we provide discounts to consumers. The key difference is that we have a physical product that accesses hundreds and soon to be thousands of permanent discounts for the consumer to make cumulative savings instead of one of monster savings.
The Daily Deal model has peaked and will die in the coming few years because more and more businesses are not wanting to give away such huge discounts AND pay commissions.
Our model is the best deal for the businesses and with the nature of tourism spending, a great deal for the consumer.

You are right I am passionate about it but I haven't let that cloud my judgement. I am not a one man band in this and we have conducted a significant amount of research into ensuring this is viable.
We have also been shortlisted for an award for businesses that can demonstrate viability, growth and job creation potential and have been judged by a panel of business and investment experts to get to this stage so I think you are underestimating me, with respect.

 

[DavidAshdown]

Thanks for your views but you are missing too many key points for me to consider them too seriously.

Your first point that coupon cards went out in the 80s is firstly complete nonsense as they are everywhere today in a multitude of formats.
The precedent has been set for people paying up front for something they are not sure they are going to use but with our product, they will see very quickly that they are likely to use it.
Everywhere they go they will see our brand, offline marketing material and regularly be offered our card to purchase from the 25% of our advertisers who want to sell the card and other 3rd party organisations such as the tourist board (strong interest noted), tour operators and petrol stations.

Very quickly into the year we will be able to invest in our Smart Phone App and for next year we will be looking to incorporate point of sale technology and card security.
We just need to sell a relatively few cards to a huge marketplace in order to generate the necessary funds to invest in this.

Also, there is no point in comparing my product/model with that of Groupon's. The only similarities are that we provide discounts to consumers. The key difference is that we have a physical product that accesses hundreds and soon to be thousands of permanent discounts for the consumer to make cumulative savings instead of one of monster savings.
The Daily Deal model has peaked and will die in the coming few years because more and more businesses are not wanting to give away such huge discounts AND pay commissions.
Our model is the best deal for the businesses and with the nature of tourism spending, a great deal for the consumer.

You are right I am passionate about it but I haven't let that cloud my judgement. I am not a one man band in this and we have conducted a significant amount of research into ensuring this is viable.
We have also been shortlisted for an award for businesses that can demonstrate viability, growth and job creation potential and have been judged by a panel of business and investment experts to get to this stage so I think you are underestimating me, with respect.

So for the fourth time of asking, how many have you sold ?

 

[drdes]

How much have you invested in teh business so far? (not specific amount but high five figure, six figures etc..?) . I am just a bit surprised that you have invested a lot of money on this business (or at least resources) and you havent got any idea whether this works or not and you have now got yourself into this cashflow dilemma. Also, I am amazed you dont have some type of mobile app for this (or mobile enabled website) - absolutely essential.

I would love to see your website - PM me if you like.

 

[Paul_Rosser]

Sorry for disappearing just as things were hotting up but the dog needed a walk!

Correct, in its first guise, our product will be in its most primitive form so no means of monitoring card usage until we can afford to incorporate some technology at the point of sale.
I totally agree that these stats will be priceless and I assure you we will be working towards this eventuality.

The spend of £1000 over the course of your holiday in order to save £200 is perfectly realistic.
We have 4 and 5 star hotels on board offering 10% - 30% off their rates from rooms that cost £150+ per night.
Additionally we have quality restaurants with main courses at circa £20 and other quality establishments.
Even on a lower budget over the course of your holiday travelling around Scotland and the UK for a couple of weeks you would be spending over £100 per day including accommodation.

On the handing the card around element, at the moment they are free to do this and we don't particularly want to stop them as this is great marketing. The card expires after 3 months so if more people get to sample it during its validity period then the more people are likely to buy it in the future.

Nothing wrong with walking the hound.

The hotels may seem a great deal, but as PSL (I think) said most people book these in advance, so unless you spend a lot on marketing people won't be aware of your card prior to booking.

Also a lot of hotels offer their rooms as discounted rates via expedia etc. so if yours are doing this your customers may find they can book cheaper via one of these sites, rather than using your card.

Are the hotels letting people who book online with them use their card at this time ? Or do they have to turn up and use it ? Also if the hotel is doing a deal with discounted rooms does the card work against that, or is it only at full price (a common trick with hotel discounts, free days etc).

Your comments on tastecards cash in bank don't really matter as they have been running for a number of years and in year one had 64k in the bank, year two 25k, year three 72k, year four 489k.

So for the first few years at least they didn't make much (if any) profit and it was only when they relaunced as tastecard (from taste london) in 2010 their cash went up, it's also possible of course this was via investors.

 

[DavidAshdown]

If I had a new product, my first form of market research would be to see if it sold. I would go out personally and see how many I could sell to complete strangers. Then if I proved it sold I would be shouting about how many I had personally sold. There doesn't seem to be much shouting here about how many are sold.

Great ideas, being shortlisted for awards and having passion is great but it doesn't prove anything.

I suspect there is only one point which is being missed.......

 

[Psl]

OP, I really would appreciate an answer, how many have you sold ?

Clearly none or very few have been sold. Classic biz mistake, good/great product and no one to sell it!

 

[DavidAshdown]

Clearly none or very few have been sold. Classic biz mistake, good/great product and no one to sell it!

Yep, although you don't actually need anyone when you have a product you are passionate about.....you have yourself.

I was asked to invest in a business last year and although I believed in it and the company had proved it sold (to some degree), I wanted to be sure so before I invested I put a bag with product over my shoulder, went out on to the streets of London (and trust me I am no door to door salesman) and went into several small retailers as a salesperson.

Luckily the response was sufficient and I sold the stock I had, so I invested.

With a product that sells at £14 and has 600 business offers I am shocked that with all the work and effort thats gone into it, no one has actually gone out and seen if they can sell it.

I remember years ago, I came across a particular product that seemed as good as sliced bread. My partner wanted to buy a container load of it. As much as I loved it, I disagreed. He got the hump and went ahead and bought it with his own money. I went out and tried to sell it. Everyone loved it but nobody bought it. He got lumbered with £40k's of product he had to literally burn !

 

[Instabus]

Is Hadrian's wall still up?

On a more serious note:

How much money do you need to tide you over (this should drive how you try to raise it - try not to do something that damages the perception of your business at its fledgling stage)

Couple of issues with your business model as you describe it:

- Charging consumers is tough (as others have mentioned) - "paying £14 to get £200 of discounts" is, believe it or not an easy a selling point as you think it is. To test this, why dont you sell it now and instead of making it for 3 months, make it "BUY NOW AND GET 6 MONTHS FOR THE PRICE OF 3 (normal length)." - this way you can find out whether people will pay for it, you get some cash coming in the door and the 6 months gives you a chance to scale up your business so that in months 4-6 your customers will be using it frequently and then be willing to pay the £14 for 3 months next time round.

- Let us know how you get along but in my view for this business model to work, you will need to get the merchants to pay rather than the customer. Your marketing costs are very high when you approach individuals, having to give up 50% commission to the retailer every 3 months. Retailers will renew directly with you if the product works for them.

- Also I think in this day and age, a mobile app or equivalent will be essential for this since people will need a way to find which businesses are participating (incidentally, how will tourists find out - will they have to download the app and have to pay data roaming charges etc...)

Thanks for joining in drdes, someone else with a discount-based product I see?

I could do with raising a net £20k before March, so if I have to spend £8k in marketing, I will need to bring in around £28k.

I don't expect this to be easy, otherwise everyone would do it but anything can be sold with the right techniques and measures in place and at the time of the full launch in spring, we will have that.

The problem with selling it now is that unless I target tourists planning their visit as another poster suggested, I don't feel confident selling it to locals because it is predominantly designed for the tourism market. Our website and nature of 30% of our businesses (25% accommodation + 5% activities and attractions) make this a product that is geared towards being marketed at visitors to the areas we have on board, so I would have to work much harder to convince locals to buy it.

Should this approach not be successful then I will look at generating the income from the merchants and in fact, I originally started out this way with some businesses paying me £50 per year to come on board.
Or as another poster suggested, I could take a cut of the discount being offered in the form of a commission.
But I do not feel in this moment any need to focus on that as I am confident with the model we have developed and time will tell if that was a good or a bad call.

There will be an app later this year - if we can sell our cards - but until then we are producing a range of offline material to aid the experience of the consumer.
Firstly, every business that chooses to will have our logo in their window, secondly, there will be a regional map available to pick up from hotels, b&bs, cafes and the tourist visitor centres which shows where the businesses are and on the back provides full contact details for them.

It is important to mention again that 70% of the tourism market is in fact domestic so there will be no roaming charges for the majority of our target market.

 

[Paul_Rosser]

Or as another poster suggested, I could take a cut of the discount being offered in the form of a commission.

You are welcome

How much have you spent so far ?

Did you not know that you would need 28k when you started with the idea ? Or did you assume that you would have sold enough cards by now to cover it ?

 

[Instabus]

I don't get it:

"ranging from hotels, B&Bs and guesthouses, restaurants and cafes, hair/beauty salons and health spas, activities and attractions, clothes, shoes and outdoor shops to laptop and mobile phone sales/repairs and even car mechanics."

How many Chinese/Japanese are going to buy a card for any of these services ? They will already have booked up their accommodation (and the card offer wouldn't come off the price they have already paid).

They would need to find that restaurant/cafe in a big city they are unfamiliar with and more than likely have to travel to it to save a couple of quid and I can't imagine many from China will want to buy a laptop in Scotland made in China !

I guess they may want to book a service for their Tut Tut if they can get it over here :-D

You clearly don't which is why I will only start including your opinions in my decision-making going forward once you do.

You mention Chinese/Japanese, well combined with Americans and every other inbound visitor they account for 30% of the total market.
There was a great suggestion earlier on how to reach these inbound visitors as they are planning their holiday and we have several more as part of our overall strategy.
But until that point comes, we are mainly focusing on the 70% of tourists who already live in the UK. That is some 63m visitors on extended visits.

Often UK tourists will travel with their laptops and mobile phones so having a handful of these services on offer (less than 1%) is simply to provide something for everyone.

But you are repeatedly missing the main point to that which is the local use of the card AFTER the holiday.
Once we have the UK covered, then no matter where you have travelled from you will be able to return home and try some local businesses that you hadn't done before with the incentive of a discount.

I don't appreciate the tone of your posts and until you are able to take in the information presented to you before posting your distorted view I won't give them the respect they would otherwise deserve.

You are a troubleshooter for SMEs?
I wonder what your success rate is there when you don't appear to listen to the facts before making your judgements.

 

[Psl]

Yep, although you don't actually need anyone when you have a product you are passionate about.....you have yourself.

I was asked to invest in a business last year and although I believed in it and the company had proved it sold (to some degree), I wanted to be sure so before I invested I put a bag with product over my shoulder, went out on to the streets of London (and trust me I am no door to door salesman) and went into several small retailers as a salesperson.

Luckily the response was sufficient and I sold the stock I had, so I invested.

With a product that sells at £14 and has 600 business offers I am shocked that with all the work and effort thats gone into it, no one has actually gone out and seen if they can sell it.

I remember years ago, I came across a particular product that seemed as good as sliced bread. My partner wanted to buy a container load of it. As much as I loved it, I disagreed. He got the hump and went ahead and bought it with his own money. I went out and tried to sell it. Everyone loved it but nobody bought it. He got lumbered with £40k's of product he had to literally burn !

That's the best way to see if something sells.


40K up in smoke - ouch!

I am sure it can be sold.

OP, here's an idea.

Get some POS material put together and go around all the newsagents, sandwich shops, independent retailers and offer them £7 per sale on each card. Leave them 20 cards a piece and and go back a week later to see how many have sold. If you can take £140 of them even better, because when they sell the retailers should be back onto you, but you must service them each week and make sure there is a stock of cards in the shop.

 

[Instabus]

Locals possibly may buy them if the shops on the discount card are ones they would use anyway, but then the retailer doesn't really gain anything all they are doing is giving away a discount to someone who was paying full price.

Someone on holiday would need to looking at spending £100+ in the places taking the card to make it worth it, they would also need to know about the card so you will need a pretty decent marketing budget.

To start with all you can do is give the cards away and hope in a year time they will have saved enough to make it worth renewing for a price.

And to use Tastecard as an example of probably the most successful and well known paid card, they made sod all for the first 5 years and now only turn a profit as they offered corporate customers huge discounts. If thats the model you are following then be prepared to have deep pockets as until you are established and have a track record it's going to be very hard (and expensive) work getting it off the ground.

On the local use, at least you are conceding that they may buy them so we are making some progress on that.
But from that point on I disagree with how you see it.

If you had an incentive in the form of a discount to try a new restaurant, shop or hair salon in your village/town/city would you not be motivated to do so?
This question is in fact rhetorical because the daily deal sites have proven that this is the case, as have to a lesser extent Taste Card and Gourmet Society.
So to say that people would only use it in places they already go is simply not a true reflection of the wider world. It may be what you would do but you are not speaking for everyone on this I assure you.

I also don't see why the cardholder would need to spend £100 in each place to make it worth it.
The purpose is not for a single use but for regular use which is how our target market - tourists, would use it as they are spending money on everything they do when they are away from home.
If we can save them money on everything they do then surely that is going to be attractive to them?

Tastecard is only the example I am using for a precedent for the model of charging the consumer a small amount of money in order to save a lot of money.
Our similarities end at that point as we have a significant focus on our 3rd party retailers as a means to selling our product.
Our 3rd party retailers are going to be marketing our product on our behalf and combined with our offline marketing activities means that we do not require the necessary £millions for marketing to the consumer the way they do.

 

[Paul_Rosser]

That's the best way to see if something sells.


40K up in smoke - ouch!

I am sure it can be sold.

OP, here's an idea.

Get some POS material put together and go around all the newsagents, sandwich shops, independent retailers and offer them £7 per sale on each card. Leave them 20 cards a piece and and go back a week later to see how many have sold. If you can take £140 of them even better, because when they sell the retailers should be back onto you, but you must service them each week and make sure there is a stick of crds in the shop.

Once again very good advice from PSL.

Forget the 80 million visitors and if I can get 1% of them and start at the bottom, see if there is a market and then build on it.

 

[Instabus]

Out of interest, how many cards have you sold to date ?

Again, you are not listening.
We have not launched our card yet so therefore, quite obviously, we have not sold any yet.

Our focus has been on adding the value to the card by signing up the businesses to provide the discounts.

How do you expect that we could have sold a discount card without any discounts available?

Please, only participate in this thread if you are able to do so in a constructive manner and to do that you need to pay at least a little attention.

 

[Paul_Rosser]

On the local use, at least you are conceding that they may buy them so we are making some progress on that.
But from that point on I disagree with how you see it.

If you had an incentive in the form of a discount to try a new restaurant, shop or hair salon in your village/town/city would you not be motivated to do so?
This question is in fact rhetorical because the daily deal sites have proven that this is the case, as have to a lesser extent Taste Card and Gourmet Society.
So to say that people would only use it in places they already go is simply not a true reflection of the wider world. It may be what you would do but you are not speaking for everyone on this I assure you.

I also don't see why the cardholder would need to spend £100 in each place to make it worth it.
The purpose is not for a single use but for regular use which is how our target market - tourists, would use it as they are spending money on everything they do when they are away from home.
If we can save them money on everything they do then surely that is going to be attractive to them?

Tastecard is only the example I am using for a precedent for the model of charging the consumer a small amount of money in order to save a lot of money.
Our similarities end at that point as we have a significant focus on our 3rd party retailers as a means to selling our product.
Our 3rd party retailers are going to be marketing our product on our behalf and combined with our offline marketing activities means that we do not require the necessary £millions for marketing to the consumer the way they do.

We don't disagree that people will want and use the card, it's the making them pay for it bit which may be the issue.

If I saw an advert in the local paper for 25% off somewhere I hadn't tried before then I would probably give it a spin, but would I fork out cash for a card which gives me discounts on places I haven't used, so have no idea if they are any good or not....then no.

I meant the cardholder would have to spend £100 in total to make the discount worth the cost of the card, which may seem quite small but some people go on holiday to scotland and don't spent that on coffee, resturants or anything else you have mentioned.

Getting 3rd party retailers is a good idea and ties into PSL's idea of trying to get them selling the card for you.

 

[DavidAshdown]

You clearly don't which is why I will only start including your opinions in my decision-making going forward once you do.

You mention Chinese/Japanese, well combined with Americans and every other inbound visitor they account for 30% of the total market.
There was a great suggestion earlier on how to reach these inbound visitors as they are planning their holiday and we have several more as part of our overall strategy.
But until that point comes, we are mainly focusing on the 70% of tourists who already live in the UK. That is some 63m visitors on extended visits.

Often UK tourists will travel with their laptops and mobile phones so having a handful of these services on offer (less than 1%) is simply to provide something for everyone.

But you are repeatedly missing the main point to that which is the local use of the card AFTER the holiday.
Once we have the UK covered, then no matter where you have travelled from you will be able to return home and try some local businesses that you hadn't done before with the incentive of a discount.

I don't appreciate the tone of your posts and until you are able to take in the information presented to you before posting your distorted view I won't give them the respect they would otherwise deserve.

You are a troubleshooter for SMEs?
I wonder what your success rate is there when you don't appear to listen to the facts before making your judgements.

I think you will find its a case of you dont like anyone who doesn't jump out and say 'wow what a great idea you have'.

You came on here asking for advice and opinion but only want 'selected' opinion. You have still failed to answer a simple question i.e. how many have you sold ?

Why the reluctance and why can't you answer that simple question ?

You keep on about what a great idea it is and all the research you have done but you do not appear to have sold any. There is no better research than seeing if someone will buy your product !

If you don't like negative comments and can't answer your critics how do you propose being in business ?

 

[Psl]

OP in one reply you state:I don't feel confident selling it to locals because it is predominantly designed for the tourism market.

yet in another reply you state:If you had an incentive in the form of a discount to try a new restaurant, shop or hair salon in your village/town/city would you not be motivated to do so?

and
The problem with selling it now is that unless I target tourists planning their visit as another poster suggested, I don't feel confident selling it to locals because it is predominantly designed for the tourism market.

OP, you need to clarify the market (s) that you want to target.

 

[Psl]

Again, you are not listening.
We have not launched our card yet so therefore, quite obviously, we have not sold any yet.

Our focus has been on adding the value to the card by signing up the businesses to provide the discounts.

How do you expect that we could have sold a discount card without any discounts available?

Please, only participate in this thread if you are able to do so in a constructive manner and to do that you need to pay at least a little attention.

How many retailers/business have you signed up to the scheme?

 

[Instabus]

And



Just for future reference, these two statements mean that no professional investor will touch you.

You are not targeting MacDonalds etc because you'd rather stick with the independents, you're doing it because the major brands aren't remotely interested in you. You need to be honest about these things and not try to spin obvious disadvantages.

Secondly, the trick of saying "I only need x% (small) of y (large number) to make this work is massively disingenuous and/or naive and as old as dirt.

Stop selling and being passionate and start being rational and honest.

I'm out too, but I'm occasionally wrong - bottled water caught me out - but please come back in Summer and rub my nose in it.

Thanks for your contribution but just to clarify, I am not looking for investment so please approach this thread without acting like you are Theo Paphitis/Deborah Meaden et al.

You are completely wrong about my reasoning for targeting independent businesses.
We are genuine champions of their activities over those of generic high street brands or large corporate chains.
As a USP, this is actually quite strong, especially from the businesses point of view as they trust that we are not simply looking to make money and actually incorporate ethics into our own practices.
We have a strong brand that will be synonymous with helping independent businesses find new customers and letting consumers (many of whom also don't like generic chains) find out about them.

On our % target market, it was perhaps the way I worded it that caused your reaction but as I said, I am not seeking investment so didn't choose my words as carefully as I otherwise would have done.
Our projections show that once at full capacity, we can sell 900,000 cards per year, which equates to only 1% of our addressable market.

 

[Psl]

We are genuine champions of their activities over those of generic high street brands or large corporate chains.
As a USP, this is actually quite strong, especially from the businesses point of view as they trust that we are not simply looking to make money and actually incorporate ethics into our own practices.
We have a strong brand that will be synonymous with helping independent businesses find new customers and letting consumers (many of whom also don't like generic chains) find out about them.

If that is all true then why not get the very retailers/businesses that support your business become your sales team? Get them selling the cards at the tills.

 

[Paul_Rosser]

Sorry but your projections are way off as you haven't actually launched yet so can't be based on any existing sales.

Even taste with their massive marketing budgets don't sell half of that and their addressable market is a lot bigger.

 

[Instabus]

This reminds me of Peel2Save which there was a long thread on a few months back.

Lots of similarities to their model.
And I suspect it was a long thread because as I have found since taking this 16 month journey, it is a divisive topic. Some people get it and love it while others don't get it and hate it!
Thankfully, I have found the negative opinions to be a vocal minority.

To the OP - Please don't take any of the criticism to heart, the people on here are just trying to make you take a step back and actually think about some of the issues you will face, both in terms of finances and growing the business.

It's very hard to be objective when you are in the middle of trying to make something work and one of the main reasons for UKBF is to get the opinions of both people in business and your potential customers.

I am not taking it to heart, otherwise I would have left hours ago!
I just get a little irritated when people offer their criticisms without bothering to take in the facts first.
You have been able to be critical while being constructive with it, which I do appreciate. I have a very thick skin btw!

Cjd - your points are valid but you are being harsh on the OP. He is asking for advice, not investment.

Sent from my MB860 using UK Business Forums

Spot on.

 

[Paul_Rosser]

If that is all true then why not get the very retailers/businesses that support your business become your sales team? Get them selling the cards at the tills.

Only issue I can see with that is if you were selling a service for say £100 would you want to advertise a card which if purchased only made you £7 but lost you £25 straight away as you have a 25% discount for card holders.

They would be better off selling their own version of the card, keeping the whole £14 and giving the same discount.

So may be better off selling them in places which aren't customers as otherwise they would be mad to push your card to their customers.

 

[Paul_Rosser]

You have been able to be critical while being constructive with it, which I do appreciate. I have a very thick skin btw!
.

Thanks

It is very hard sometimes though as people only have the facts provided and don't have a proper overview of where your business is, so can only give general advice.

 

[Instabus]

Sell the cards then get more restaurants etc on board. Tailor the businesses on the cards to the customer profile.

How do we know people will not travel the extra half mile to get a discount?

I must admit that the laptop sales outlets will not get much biz, nor the hotels.

The tourist attractions need to be signed up, whiskey distilleries, golf clubs, golf shops etc etc.

Maybe you can get through to him. Thanks for trying.

The laptop sales/repairs account for 1% of our businesses and are there only to add a little more variety in the unlikely event that a visitor needs their laptop repaired or to purchase a new peripheral/accessory.
But these are mainly there to add value to the local aspect of the card for when the domestic tourists return home after their holiday.

We already have some key and very popular tourist attractions signed up along with 5 James Braid designed golf courses.

 

[Psl]

Only issue I can see with that is if you were selling a service for say £100 would you want to advertise a card which if purchased only made you £7 but lost you £25 straight away as you have a 25% discount for card holders.

They would be better off selling their own version of the card, keeping the whole £14 and giving the same discount.

Good point but most retailers can't be bothered to set one up. And how many discount card can one person carry with them?

The customer is going to get the 25% discount anyway if the retailer is signed up to the scheme, irrespective of where the card was bought! Better for the retailer to get £7 back from the 25% discount given to the shopper.

 

[Paul_Rosser]

Maybe you can get through to him. Thanks for trying.

The laptop sales/repairs account for 1% of our businesses and are there only to add a little more variety in the unlikely event that a visitor needs their laptop repaired or to purchase a new peripheral/accessory.
But these are mainly there to add value to the local aspect of the card for when the domestic tourists return home after their holiday.

We already have some key and very popular tourist attractions signed up along with 5 James Braid designed golf courses.

Golf courses are good, maybe speak to some of the tour operators who specialise in golf breaks to see if they can value add it to people making bookings for a fee per card sold.

 

[Paul_Rosser]

Good point but most retailers can't be bothered to set one up. And how many discount card can one person carry with them?

The customer is going to get the 25% discount anyway if the retailer is signed up to the scheme, irrespective of where the card was bought! Better for the retailer to get £7 back from the 25% discount given to the shopper.

Only if the person walks in with the card, if you are expecting them to try and sell it for you then they are in effect offering a discount on day one to a customer already stood in their store, so it hasn't really generated any additional sales.

 

[DavidAshdown]

Again, you are not listening.
We have not launched our card yet so therefore, quite obviously, we have not sold any yet.

Our focus has been on adding the value to the card by signing up the businesses to provide the discounts.

How do you expect that we could have sold a discount card without any discounts available?

Please, only participate in this thread if you are able to do so in a constructive manner and to do that you need to pay at least a little attention.

I am listening. I am listening to the fact that you state that you have signed up 600 outlets but as yet have failed to produce a card or sell any. Why on earth not ? This is the best way to test the theory.

You state amazing forecasts but with nothing to substantiate it. You are also looking at a tiny budget and expecting to sell endless amounts with no trials or tests.

Nobody is trying to deliberately wreck your idea, so it is crazy coming on here and getting irritated when you don't like what you hear.

 

[Instabus]

I think OPs definition of "crowdfunding" (as he describes) is a bit vague - Not sure giving a "donation" for a discount card today to get a discount on the next one quite counts as an "investment" in my book...and I certainly woudn't be doing any due diligence on a £5 "investment" that returns me a tenner in 3 months.

Admittedly it was a long OP so maybe I am confused.

You are correct again, thank you for assisting.
Admittedly, my original post did have the potential to lose the focus of anyone reading it but I have summarised this particular point since then.

This "crowdfunding" idea is simply a way to tap into the collective support of a large crowd by asking them to offer a very small donation.
In return for that donation, they would be rewarded with free products and eternal gratitude from us, and will be made to feel like they are part of a wider success. This feelgood factor with rewards was the standard model of crowdfunding before equity based platforms appeared.

I was thinking that by giving away 100,000 cards for free, that would be enough to engage these potential donors and my feeling was that with the right level of engagement, we could encourage 5% of them to donate a fiver.

So bringing it back on topic. Is this something you or anyone else would do?

 

[Paul_Rosser]

If you give away 100,000 cards on a 3 month trial and then when the trial is up charge £5 for an additional 9 months.

Then in 3 months time you will soon find out the demand based on the number of people who renew.

Or is that just too simple ?

 

[Psl]

If you give away 100,000 cards on a 3 month trial and then when the trial is up charge £5 for an additional 9 months.

Then in 3 months time you will soon find out the demand based on the number of people who renew.

Or is that just too simple ?

How do you collect the money in three months?

 

[Paul_Rosser]

How do you collect the money in three months?

The card they have for free only lasts 3 months, so after 3 months you sell them in the same way the OP is going to sell the full cards.

Via the web, phone or via a stockist I guess.

 

[cjd]

Thanks for your contribution but just to clarify, I am not looking for investment so please approach this thread without acting like you are Theo Paphitis/Deborah Meaden et al.

As I say, this is a public forum, you don't get to dictate how people respond.

Just for clarity - the phrase "I'm out" doesn't mean I'm a likely investor and you're punting for cash - it just means I don't think this idea is going to work.

I'm dubious of citing personal experience because it's almost always a dumb way of trying to make decisions but I was given a Taste Card for last Christmas and totally forgot about it - never used.

I did, however, visit Berlin in November and bought a 5 day train pass at the airport which came with quite a big book full of tourist guides, information and discounts to tourist sites and restaurants.

A discount of 50% off a food bill for 4 at a restaurant I was planning to visit anyway did manage to overcome my cynicism.

Now that idea had real focus (one city, tourists on arrival, linked to a necessary purchase, no charge, large discounts at all the right places) and I did wonder who was behind it. Selling that deal to the Berlin train company WOULD work.

For what it's worth - I think your model is too diverse, too unfocused and as it requires the end user to pay in advance for a discount, I don't think it has a cat in hell's chance.

But like I say, I'm occasionally wrong and I'm particularly weak on pure marketing schemes. Do prove me wrong.

 

[Instabus]

I would take the hotels out of the tourist card offering and create a business- traveller card offering as well. Make both specific to the markets that you are servicing.
Hotels, garages, tyre, laptop repairs etc for the business card. Tourist attractions etc for the tourist card, and there will be business that go on both cards.

It's a good suggestion like many of yours have been however I don't agree on removing the accommodation from the tourism card considering it is something they are guaranteed to spend their money on every single day of their holiday.

We do have a corporate card planned for business tourists, which is a growing sub-sector but hadn't decided on how we would split the offerings up, if at all.

It is important to understand how a significant proportion of UK tourists behave. If they are domestic then they are often travelling by car/caravan/motorbike/bicycle and with their laptop/mobile and even their pets.

If we can get people to purchase the card before booking up all of their accommodation (which I think it was you who came up with a suggestion of a way to do that - sorry to the person it was if I am mixing you up) then it still has a solid place on our card.
But in reality, not everyone does book all of their accommodation in advance as they like to have the freedom to change their route along the way.

 

[Psl]

You are correct again, thank you for assisting.
Admittedly, my original post did have the potential to lose the focus of anyone reading it but I have summarised this particular point since then.

This "crowdfunding" idea is simply a way to tap into the collective support of a large crowd by asking them to offer a very small donation.
In return for that donation, they would be rewarded with free products and eternal gratitude from us, and will be made to feel like they are part of a wider success. This feelgood factor with rewards was the standard model of crowdfunding before equity based platforms appeared.

I was thinking that by giving away 100,000 cards for free, that would be enough to engage these potential donors and my feeling was that with the right level of engagement, we could encourage 5% of them to donate a fiver.

So bringing it back on topic. Is this something you or anyone else would do?

Why give it away and hope that people will donate? On the church works on that business model they give some hope and some people pay, sorry donate.

Sell it to people and use the marketing line '£10 gets U 10% discount at 600 retailers and businesses' simple and to the point and it gives the users clarity and the retailers and businesses a pre-defined level of discount to offer.